New Delhi: The ghost of demonization has resurfaced to haunt Modi just ahead of polls. In a stunning revelation, it has been exposed that the reserve Bank of India (RBI) board had warned against the short-term negative effects of demonetisation on growth and had noted that it would have no material impact on the campaign against black money.

The central bank had also listed four objections to the overnight note ban announced by Prime Minister Narendra Modi before agreeing to it "in larger public interest", an RTI reply has revealed.

According to the minutes of the meeting revealed by the central bank in an RTI query, The RBI Board had met just two-and-a-half hours before Prime Minister Narendra Modi announced the demonetisation decision through a televised speech on November 8, 2016.

The ban of high denomination currency notes of Rs 500 and 1,000 that wiped out 86 per cent of the cash in circulation was announced even before the board's approval.

According to the RTI reply, the approval for note ban was sent to the government five weeks later, on December 16, and the RBI had recorded its objections to most of the government's arguments for banning high value notes. The crucial board meeting was attended by Governor Urjit Patel and the then economic affairs Secretary Shaktikanta Das, Financial Services Secretary Anjuli Chib Duggal, and RBI deputy governors R Gandhi and S S Mundra.

The government’s argument that the circulation of Rs 500 notes was up by 76 per cent and Rs 1,000 up by 109 per cent did not go well with the RBI which said this is not adequate to support cash ban recommendation.

The RBI had said that counterfeiting was a concern, but the Rs 400 crore as a percentage of the total quantum of currency in circulation in the country is not very significant.

Of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes in circulation, notes worth Rs 15.31 lakh crore were exchanged by the public in the 50 day period given by the govt.

Only Rs 10,720 crore of the high value currency notes did not return to the banking system, and rest 99.9 per cent was deposited raising question mark over the government's decision.

"It is a commendable measure but will have short-term negative effect on GDP for the current year," as per the minutes posted by RTI activist Venkatesh Nayak on the website of Commonwealth Human Rights Initiative .

Most of the black money is held not in the form of cash but in the form of real sector assets such as gold or real estate and that this move would not have a material impact on those assets," the board observed in its 561st meeting held in Delhi.